Latest / The CMO Podcast with Fexingo: Marketing Leadership, Budgets, and Executive Strategy / Why Restaurant Chains Are Killing Their Own Mobile Apps
Transcript
- Lucas: There is a scene playing out in restaurant marketing right now that most consumers probably haven't noticed yet, but the numbers are impossible for a CMO to ignore. After almost a decade of pushing customers into branded mobile apps — exclusive deals, loyalty points, order ahead, the whole ecosystem — some of the biggest quick-service chains are quietly pulling back. Luna: Pulling back how? I mean, Starbucks basically built its entire digital strategy around the mobile order-ahead app. That thing was a case study for years. Lucas: Exactly the one. And McDonald's famously moved its entire Monopoly promotion into the app. But here's what changed: in 2025, overall app engagement for quick-service restaurants in the US dropped about 30 percent year-over-year. That's not a blip. That is a structural shift in how customers want to interact with these brands. Luna: Thirty percent is huge. So the question is, what drove it — fatigue, too many apps, or something else? Lucas: All of the above. Let's start with McDonald's. In February of this year — 2026 — they ended their 'only in the app' daily deal. You know, the one that gave you a dollar coffee or a free McFlurry if you ordered through the app. That deal had been a core acquisition tool for years. But franchisees were complaining that it trained customers to expect discounts every time, and it undermined margins. Luna: Right, and the app-only deal also created a two-tier customer experience. People who didn't want to download another app or didn't have a smartphone — or just forgot — ended up paying full price while app users got the deal. That feels inequitable over time. Lucas: Exactly. And it creates operational friction. The app orders stack up, the kitchen gets overwhelmed, and the in-store experience suffers. McDonald's hasn't killed the app — it's still there — but by pulling the daily deal, they're signaling that the app is no longer the center of their marketing gravity. Luna: Starbucks is a more complicated case. Their app is still wildly popular — they had something like 32 million active members in Rewards as of last year. But internally, there's a debate about whether the mobile order-ahead channel has actually hurt the brand. It's made the stores feel like warehouses. Lucas: And it killed the serendipity of the coffee shop experience. You used to walk in, smell the coffee, chat with the barista, maybe buy a pastry you didn't plan on. Now you grab your bagged drink from a shelf and leave. Starbucks' own data showed that mobile order customers spend less on impulse items than in-line customers. Luna: So the app was actually reducing average ticket size. That's a fascinating counterpoint to the whole 'digital engagement' narrative. More engagement through the app, but less revenue per visit. Lucas: Precisely. And then there's Domino's, which is an interesting outlier. Domino's leaned so hard into its app — the pizza tracker, the easy ordering — that it became synonymous with the brand. But even Domino's is now putting more energy into partnerships with third-party delivery platforms like DoorDash and Uber Eats. That's a pivot. Luna: Because for years, Domino's explicitly positioned its own delivery as a competitive advantage. They built their own supply chain, their own drivers. Partnering with third parties feels like admitting defeat on that front. Lucas: Or admitting that the customer wants choice. A 2025 survey from Technomic found that 62 percent of quick-service customers said they prefer to order through a third-party aggregator rather than a brand's own app, even when the brand's app offers better prices. The reason: convenience of having all your orders in one place. Luna: That's a brutal statistic for CMOs who spent millions building proprietary apps. The customer literally prefers the worse deal because it's easier. Lucas: And that's the marketing challenge in a nutshell. You can build the perfect loyalty ecosystem, but if the customer has to open a separate app for every burrito, every burger, every coffee, they will eventually rebel. The friction of app-switching outweighs the benefit of the deal. Luna: So what's the alternative? Do you just give up on owned channels and hand all customer data to DoorDash? Lucas: That's the fear. But the smarter chains are moving toward a hybrid model. They keep the app for loyalty and payments — the high-friction, high-value interactions — but they stop making it the exclusive gatekeeper for deals. They put the same offers on third-party platforms, on kiosks, at the counter. The app becomes one channel among many, not the only channel. Luna: That requires a lot of internal discipline. Because the marketing team probably fought hard for app exclusivity. They had the metrics to justify it. Now they have to unwind that. Lucas: Yeah, and speaking of internal discipline — and I want to be honest here — this is actually a good moment to mention that this show stays ad-free and independent because of listeners who choose to support it. If these marketing conversations have sparked something you've actually used in your work, or just found useful, a small group of listeners already chips in monthly at buy me a coffee dot com slash fexingo. It's not a big ask — just that the economics of making this many episodes work because of that direct support. Luna: Yeah, and it keeps us free from sponsor pressure, which honestly lets us talk about stuff like McDonald's pulling a promotion without having to worry about who's buying ads. So, appreciate that. Lucas: Back to the apps. Let's talk about the cost side, because that's another reason CMOs are rethinking this. Maintaining a branded app with personalized offers, push notifications, and loyalty tracking is not cheap. We're talking tens of millions a year for a large chain. And if engagement is dropping, the return on that investment gets harder to defend in a budget meeting. Luna: Especially when you compare it to the cost of listing on a third-party platform. DoorDash and Uber Eats take a cut — typically 15 to 30 percent per order — but they handle the technology, the discovery, the payment processing. For a chain that's not seeing app ROI, that trade-off starts to look pretty good. Lucas: But here's the catch: when you hand over the ordering experience to DoorDash, you hand over the customer relationship. DoorDash owns the data. They know what else the customer eats, where else they order from, how price-sensitive they are. The brand becomes a menu item in someone else's store. Luna: That's the fundamental tension. Own the channel, own the data, but risk low adoption. Outsource the channel, lose the data, but get the reach. Is there a middle ground where you get both? Lucas: A few chains are experimenting with something called 'branded storefronts' on third-party platforms. It's still the aggregator's infrastructure, but the branding is more prominent, and the chain gets limited data access. It's not as good as owning the app, but it's better than being a generic listing. Luna: Wendy's tried that last year with a partnership with Google for ai driven ordering. That's a different approach — using a tech giant's platform rather than a delivery aggregator. Lucas: And that leads to another angle: voice ordering and in-car ordering. As those channels grow, the idea of a dedicated app becomes even less relevant. You're not going to download a McDonald's app onto your car's dashboard. You're going to use Google Assistant or Apple CarPlay to order from wherever you want. Luna: So the app becomes just one interface in a multichannel world. The brand has to be present everywhere, not exclusive anywhere. Lucas: Right. And that's actually a more sophisticated marketing strategy than the app-first approach. It requires consistent brand identity across platforms, dynamic offer management, and a unified loyalty backend regardless of where the order originates. That's hard. Luna: It also means CMOs have to be fluent in platform economics — knowing the terms of each aggregator, the fee structures, the data-sharing policies. It's a different skill set than building a proprietary app. Lucas: Absolutely. And I think the next few years will separate the chains that can manage that complexity from the ones that get stuck in the middle — too invested in their app to let go, but not getting enough engagement to justify it. Luna: So if you're a CMO listening, what's the one concrete action you'd recommend taking this quarter? Lucas: Audit your app's exclusive offers. Ask: if we removed the exclusivity and put those same deals on third-party platforms, would our overall margins improve or worsen? If the answer is improve, you're probably over-invested in the app. If it's worsen, then the app is still earning its keep. But don't assume. Run the math. Luna: That's a good takeaway. And it's a reminder that no channel is sacred — not even one you spent five years and fifty million dollars building. Lucas: Yeah. The marketing graveyard is full of strategies that made perfect sense at the time. The question is whether you can recognize when the environment has shifted before the numbers force you to.